Question

14. Stock market efficiency An analyst believes that the intrinsic value of Green Caterpillar Garden Supplies Inc.s stock is

0 0
Add a comment Improve this question Transcribed image text
Answer #1

If the analyst is correct, this would be considered an inefficient market. This is because in an efficient market, there are no mispriced securities

The second option is correct. Because the small companies segment of the stock market is relatively inefficient, stock selection can result in excess returns.  

The first option is incorrect. Because the small companies segment of the stock market is relatively inefficient, picking undervalued individual companies can result in maximized returns

Add a comment
Know the answer?
Add Answer to:
14. Stock market efficiency An analyst believes that the intrinsic value of Green Caterpillar Garden Supplies...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Green Caterpillar Garden Supplies Inc.’s stock finished trading at a price of $42.01 for the day....

    Green Caterpillar Garden Supplies Inc.’s stock finished trading at a price of $42.01 for the day. The market price had varied from $41.93 to $42.10 throughout the day as buy and sell orders came in. It would be reasonable to consider the price of $42.01 per share as the firm’s_____________ for the day. (intrinsic value or equilibrium price) Read the following statement, and use its information to determine which of the following statements is most accurate. Nazim is a stock...

  • Please answer 14. Stock market efficiency An analyst believes that the intrinsic value of Black Sheep...

    Please answer 14. Stock market efficiency An analyst believes that the intrinsic value of Black Sheep Broadcasting Company's stock is around $45 per share, but the firm's stock is currently trading at $20 per share. If this analyst is correct, this would be considered an market. Read the following statement, and use its information to determine which of the following statements is most accurate. Steven's finance professor in college convinced him that the stock market is an efficient market. Steven...

  • The following graph shows a stock's actual market price and intrinsic value over time. The intrinsic...

    The following graph shows a stock's actual market price and intrinsic value over time. The intrinsic value comes from another research analyst. Use the dropdown menus to label the periods in which the stock was undervalued or overvalued. Actual Stock Price 30 Intrinsic Value 29 28 27 26 25 24 22 21 20 2017 2013 2014 2015 2016 2018 Years A Stock Price and Intrinsic Value ($) The intrinsic value of a company's stock, also known as its fundamental value,...

  • The intrinsic value of a company's stock, also known as its fundamental value, refers to the...

    The intrinsic value of a company's stock, also known as its fundamental value, refers to the stock's "true" value based on accurate risk and return data. The value perceived by stock market investors determines the market price of a stock. A stock trading at a price below its intrinsic value is considered to be undervalued. A stock trading at a price above its intrinsic value is considered to be overvalued. The goal of the managers of a publicly owned company...

  • 13. Stock market efficiency Aa Aa E All the top analysts who follow Three Waters Co.'s...

    13. Stock market efficiency Aa Aa E All the top analysts who follow Three Waters Co.'s stock think that the firm's stock price for the last three months should have been right around $55 per share based on the available risk and return data. However, buy and sell orders have been dramatically fluctuating around the price of $55 per share over the last three months. It would be reasonable to consider the price of $55 per share as the firm's...

  • What was Novartis ́ main challenge in managing talent in China? Novartis case . Global Talent...

    What was Novartis ́ main challenge in managing talent in China? Novartis case . Global Talent Management at Novartis I do not know how to post the PDF case? cloud you tell me how to give the case Sourcing Talent Globally The company was actively involved in sourcing talent from increasingly dispersed locations. Managers were encouraged to keep an updated list of leadership talent. In addition, the company 7 708-486 Global Talent Management at Novartis had recently expanded its hiring...

  • Is there one universal way for a MNC to motivate its employees around the world to...

    Is there one universal way for a MNC to motivate its employees around the world to exert maximum effort and be accountable for their results? case: Global Talent Management at Novartis I do not know how to give you the whole case Sourcing Talent Globally The company was actively involved in sourcing talent from increasingly dispersed locations. Managers were encouraged to keep an updated list of leadership talent. In addition, the company 7 708-486 Global Talent Management at Novartis had...

  • SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the...

    SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the company's new line of single-serve coffee pods or to await results from the product's launch in the United States. Key strategic decisions include choosing the target market to focus on and determining the value proposition to emphasize. Important questions are also raised in regard to how the new product should be branded, the flavors to offer, whether Kraft should use traditional distribution channels or...

  • How can we assess whether a project is a success or a failure? This case presents...

    How can we assess whether a project is a success or a failure? This case presents two phases of a large business transformation project involving the implementation of an ERP system with the aim of creating an integrated company. The case illustrates some of the challenges associated with integration. It also presents the obstacles facing companies that undertake projects involving large information technology projects. Bombardier and Its Environment Joseph-Armand Bombardier was 15 years old when he built his first snowmobile...

  • Why are networks and industry relationships important to TWC? What other strategies could an eco-tourism business...

    Why are networks and industry relationships important to TWC? What other strategies could an eco-tourism business of this size use to source ideas and incorporate into its new product development strategy? Tasmanian Walking Company: Balancing luxury and adventure in a sustainable experience Gemma Lewis, PhD University of Tasmania, Australia the organic skincare range supplied by LITYA (Li'tya, 2016). Before introducing this new activity, TWC had to adapt certain treatments to ensure they maintained ocus on sustainable resaurce usage. Their outecor...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT